Power utility Eskom has issued a notice of intent to reduce, interrupt or terminate electricity supply to bulk supply points in Johannesburg amid a spiralling debt crisis that threatens the country’s economic hub.
The City of Johannesburg and City Power face a looming 8 July deadline to resolve outstanding debts of R5.2 billion, with an additional R1.5 billion due in June. The warning marks an escalation in the municipal debt crisis that has seen total arrears to Eskom reach R111.6 billion across the country.
Eskom said it had worked with the city and City Power for over two years to support payment arrangements, but repeated defaults had forced the utility’s hand.
“It cannot be acceptable to the city’s residents and all South Africans that the city is failing to pay over Eskom’s share of electricity revenue collected,” the power utility said in a statement.
The threat comes just months after a settlement agreement in June 2025, where City Power committed to clearing R3.2 billion in debt over four years. Eskom wrote off R830 million in penalties as part of that deal, yet the city appears to have accumulated fresh arrears.
City Power CEO vacancy sparks political row
The Democratic Alliance’s Johannesburg shadow MMC for infrastructure services, Cllr Tyrell Meyers, said the timing was particularly concerning given City Power’s decision to reduce qualification requirements for its vacant CEO position.
“Lowering the job requirements for a CEO in the face of a looming power crisis is both ill-advised and raises fresh questions about who the ANC wants to embed in the position,” Meyers said.
The original advertisement required stronger technical qualifications and professional registration with the Engineering Council of South Africa, but a revised version only requires candidates to be eligible for registration.
The Inkatha Freedom Party’s Johannesburg mayoral candidate Mlungisi Mabaso warned that residents and businesses would be severely affected by any power cuts.
“Eskom’s debt issue should not prevent effective city leadership,” Mabaso said, according to reports.
National debt crisis reaches R111.6 billion
The crisis reflects broader challenges facing municipalities nationwide. In early May, Eskom secured Distribution Agency Agreements with nine municipalities, allowing the utility to collect revenue directly. Three municipalities – Dr Beyers Naude, Kai!Garib and Mamusa – faced immediate power cut threats after failing to present viable debt solutions.
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The Organisation Undoing Tax Abuse has criticised Eskom’s approach, arguing that supply interruptions risk penalising paying residents and businesses for municipal governance failures.
Under the Distribution Agency Agreement model, Eskom offers skills development, smart meter installation and direct revenue collection to restore financial sustainability to struggling municipalities.
Financial sustainability at stake
The utility maintains that escalating municipal debt undermines its cost-efficiency efforts and threatens its ability to supply electricity at affordable prices. Revenue can only be increased by collecting debts or raising tariffs, Eskom noted.
The standoff with Johannesburg – home to Africa’s largest stock exchange and key mining houses – highlights the fragility of South Africa’s electricity supply as the country emerges from years of load shedding.
Economic implications for Africa’s financial hub
Earlier this year, the Johannesburg council adopted an EFF-led motion to scrap municipal debt for registered indigent households and end water and electricity disconnections for those unable to pay.
The 8 July deadline gives the city just over six weeks to find a solution or face the prospect of power cuts to Africa’s wealthiest square mile.
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